Different groups of investor will have different interpretation on both situation. During downward trend (negative MACD), some investors view it as a signal to accumulate share in cheap price. However, some investors may view it as a signal to sell off share on hand, to avoid further paper loss.

Final Note

There is no exact right period for MACD. The longer the time period, the less sensitive the moving average to daily price change noises. User shall experiment with various time period, according to current market condition.